How Does the IoT Affect the Future of Accounting?

The Internet of Things (IoT) is transforming the world as we know it, empowering everything from wearables to smart sensors. These devices now represent a market value of $761.4 billion, growing at a 10.53% CAGR. The reasons for this are many, but for today’s business professionals, the growth of IoT means more than just investment opportunities. 

Instead, the IoT is affecting the future of work, changing the necessary functions of many jobs. This includes the accounting industry, naturally.

But what exactly will these changes look like? How is IoT impacting accounting and finance? The answer comes down to knowledge, potential, and efficiency.

Increasing knowledge and transparency with data

With the help of the IoT, “wireless internet connectivity isn’t any longer solely restricted to ‘smart’ devices. They will now be implemented on any device or appliance, even mechanical ones with the use of sensors and different IoT-enabled devices” (Techiefinance). What this means is that even more data can be recorded, modeled, processed, and analyzed than was ever before possible. This is vital for building the kinds of self-auditing, transparent systems that every accountant wants in his/her organization.

IoT plays an important and unique role in data collection and analysis. Financial IoT stands to measure everything from value estimations to insurance underwriting provisions, with unprecedented use of real-time and predictive telematics (sensors that can monitor item usage). This means that accountants will be able to make use of more relevant financial and budgetary information and form more accurate predictions of what the financial future of an organization might look like. This, in turn, adds value to the role of the accountant. 

In the meantime, technology is making it much more possible for accountants to work from home. The growing field of virtual accounting work is empowered by digital tools like enterprise resource management software, which monitors business functions and information for analysis in a comprehensive dashboard. Access to tools like these on a secure private network means that accountants have what they need to comfortably and safely work from home — provided they free themselves from distractions first.

With a wealth of financial insights at hand and the ability to do their work from anywhere, accountants have everything they need to improve a business’s processes. 

Improving decision making with real-time analytics

Amidst advancing tech and transformative processes, the role of the accountant is already changing into more of an advisory one. This means that instead of providing the kinds of manual – and error-prone – bookkeeping services common in past ventures, accountants these days apply their expertise more towards guidance and data analytics. The IoT is everything when it comes to these processes.

This is because financial decisions tend to be more accurate with access to real-time information. IoT tools can connect accountants to a real-time data network, with machine accuracy. Everything from inventory to sales to accounts payable can be tracked with greater precision and skill. When the time comes to act on the data, accountants can be sure they are making recommendations using relevant insights. 

Automating tedious tasks

Automation is one of the most incredible areas of potential when it comes to IoT devices. This is because only the IoT provides the kinds of accurate real-time insights necessary for successful automation. 

In the accounting field, the IoT is already automating many data entry and reconciliation procedures. The IoT allows payment systems and software to communicate with a centralized dashboard. This in turn keeps all financial information smoothly flowing into a singular source. 

An algorithmic assessment of IoT data can produce invoices, reports, and more, leaving an accountant with much more time on their hands to focus on company growth. Meanwhile, IoT networks can help by flagging any problems, helping to maintain the integrity of accounting information. 

With automation potential in everything from reconciliation to the application of secure digital signatures, using advanced technology has become a common element of the job. But this automation is unlikely to displace accountants any time soon. Instead, these tools empower rather than replace accountants.

Empowering accountants into the future

As technology continues to advance into the future, accounting and finance professionals will have to adapt with it. This means pivoting into more advisory roles, taking clients through their finances, and offering predictions and recommendations. The IoT helps in this process by providing a collection of insights in one place. However, it will take an expert to navigate these data-driven resources and translate their knowledge into value for clients and companies.

For any accounting firm, harnessing the power of the IoT now can help you guarantee business growth in the future.

Note: This blog article was written by a guest contributor for the purpose of offering a wider variety of content for our readers. The opinions expressed in this guest author article are solely those of the contributor and do not necessarily reflect those of GlobalSign.